" (h) The terms 'construction', 'reconstruction', or 'reconditioning' shall include, but shall not be limited to, designing, inspecting, outfitting, and equipping." SEC. 2. Section 1102 of the Merchant Marine Act, 1936 (46 U.S.C. 1272) is amended as follows: (1) By striking from the first sentence thereof the words "Federal Ship Mortgage Insurance Fund (hereinafter referred to as the f u n d) " and inserting in lieu thereof the words "Federal Ship Financing Fund (hereinafter referred to as the F u n d) ". (2) By deleting the word "fund" immediately preceding the words "the sum of $1,000,000" and inserting in lieu thereof the word "Fund". (3) By deleting the words "Section 1110 (46 U.S.C. 1279)" at the end of the first sentence thereof and inserting in lieu thereof "Section 1107 (46 U.S.C.) ". (4) By deleting the word "fund" from the last sentence thereof wherever it appears and inserting in lieu thereof the word "Fund". SEC. 3. Sections 1103 through 1109 of the Merchant Marine Act, 1936 (46 U.S.C. 1273-1278) are amended by striking such sections entirely and inserting in lieu thereof the following: "SEC. 1103. (a) The Secretary of Commerce, upon application by a citizen of the United States, is authorized to guarantee, and to enter into commitments to guarantee, the payment of the interest on, and the unpaid balance of the principal of, any obligation which is eligible to be guaranteed under this title. "(b) No obligation shall be guaranteed under this title unless the obligor conveys or agrees to convey to the Secretary of Commerce such security interest, which may include a mortgage or mortgages on a vessel or vessels^ as the Secretary of Commerce may reasonably require to protect the interests of the United States. "(c) The Secretary of Commerce shall not guarantee the principal of obligations in an amount in excess of 75 per centum, or 87VI per centum, whichever is applicable under section 1104 of this title, of the amount, as determined by the Secretary of Commerce which determination shall be conclusive, paid hj or for the account of the obligor for the construction, reconstruction, or reconditioning of a vessel or vessels with respect to which a security interest has been conveyed to the Secretary of Commerce, unless the obligor creates an escrow fund as authorized by section 1108 of this title, in which case the Secretary of Commerce may guarantee 75 per centum or 871/1 per centum, whichever is applicable under section 1104 of this title, of the actual cost of such vessel or vessels. " (d) The full faith and credit of the United States is pledged to the payment of all guarantees made under this title with respect to both principal and interest, including interest, as may be provided for in the guarantee, accruing between the date of default under a guaranteed obligation and the payment in full of the guarantee. "(e) Any guarantee, or commitment to guarantee, made by the Secretary of Commerce under this title shall be conclusive evidence of the eligibility of the obligations for such guarantee, and the validity of any guarantee, or commitment to guarantee, so made shall be incontestable. " (f) The aggregate unpaid principal amount of the obligations guaranteed under this section and outstanding at any one time shall not exceed $3,000,000,000. "SEC. 1104. (a) Pursuant to the authority granted under section 1103(a), the Secretary of Commerce, upon such terms as he shall prescribe, may guarantee or make a commitment to guarantee, payment of the principal of and interest on an obligation which aids in—